Tuesday, 16 October 2012

Germany raises electricity charge to finance renewables

Germany's electrical grid operators said Monday they were raising by nearly 50 percent the charge to consumers that finances subsidies for renewable energy as the country phases out nuclear power. Consumers will be asked to pay a charge of 0.05277 euros per kilowatt hour of electricity consumed in 2013, the firms said, compared with a 0.03592-euro surcharge this year. For an average three-person house, this 47-percent increase amounts to an additional 60 euros ($77.8) per year, taking the overall charge up to about 185 euros annually. In total, the network operators hope to collect more than 20 billion euros to subsidise renewable energies. On Thursday, Environment Minister Peter Altmaier said that Germany, Europe's top economy, wanted to meet 40 percent of its energy needs with renewable sources by 2020, up from a previous target of 35 percent. By 2050, the government aims to supply four-fifths of Germany's power needs from alternative energy sources such as solar or wind energy. "It's clear that the energy switch-over that we all want and that I want to succeed, won't come free," Altmaier told Monday's edition of the mass-circulation daily Bild. Claudia Kemfert, from the DIW economic institute, warned that the poorer-off in society needed to be shielded from the hike but stressed that the renewable energy sector in Germany would continue to create jobs. "The increase in this charge is manageable for many households, but there are also very poor, low-income households which could be negatively affected by this type of price rise," Kemfert said. "We need to think about ways to help these households financially, so they can save energy and electricity," she added. Nevertheless, the renewables sector already employed 400,000 people in Germany and "this number will rise," she noted. "Therefore, this is a positive development for Germany." However, an association representing the chemical industry slammed the charge as a "bottomless pit." Firms that use a lot of electricity, such as the chemical sector, can apply for an exemption in paying the charge or benefit from a lower amount. More than 2,000 companies have applied for special treatment for next year. Karl-Ludwig Kley, head of the German chemical industry association, said: "The costs for consumers and industry of the electricity price charge for renewable energy has risen to an unbearable degree." The costs for the chemical sector would rise from 550 million euros this year to 800 million euros in 2013, Kley said. Germany decided in the immediate wake of Japan's 2011 Fukushima nuclear plant disaster to shut down its nuclear reactors by 2022 and ramp up the use of renewable energy. Chancellor Angela Merkel has made the so-called "Energiewende", the term used to describe both the end of nuclear power and the promotion of renewable energy sources, one of her government's priorities. However, the policy has run into difficulties, notably due to technical and financing problems as well as because of local resistance to building new power lines. In February, Germany was forced to tap into its electricity reserves amid a cold snap, sparking fears that the switch out of nuclear power could result in power shortages. Germany, one of Europe's biggest countries, also faces transmission problems, with much of the production capacity offshore in the north but much of the demand hundreds of kilometres (miles) away in the south. According to the EU statistical office Eurostat, the average household electricity price is 0.253 euros per kilowatt hour, the second highest in the 27-member bloc behind Denmark. The World Wildlife Fund in Germany warned that a "hysterical debate" was now taking place. "Only one-third of electricity price rises since 2000 is due to support for renewable energy," said Regine Guenther, the group's head of climate and energy policy in Germany.

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